The 888 (LON: 888) share price went parabolic on Wednesday as investors reacted to the latest deal by Caesars concerning its William Hill stake. The stock rose by as much as 26% in early trading and is hovering at the highest point since February this year.
Caesars’ William Hill stake
Caesars Entertainment is a giant American casino company that operates using various brands like Caesars, Harrahs, Eldorado, and Horseshoe. The firm generates over $10 billion in annual revenue and has a market cap over $15 billion.
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Like all American casino companies, Caesars has been expanding its digital offerings as most states legalize the practice. One of their strategies has been to acquire established brands in a bid to compete.
It is along these lines that Caesars announced that it would acquire William Hill, a leading British company for 2.9 billion pounds. As part of the deal, the company decided to sell the non-UK business to 888 Holdings in a 2.2 billion pound deal.
888, on the other hand, is a British company that operates numerous brands in the sports betting, online casino, and poker. It owns companies like 888Poker, 888Casino, 888Sport, and 888Bingo.
The 888 share price jumped sharply after Caesars decided to cut the amount of money it is seeking from 888 for the William Hill stake. It decided to sell the business for an enterprise value of between 1.95 billion pounds and 2.05 billion pounds. That means that the company gave 888 a discount of 250 million pounds. At the same time, Caesars will be entitled to a 100 million pounds as deferred consideration.
Therefore, the 888 share price is rising as investors anticipate a special dividend or share repurchases from these savings.
888 share price forecast
![888 share price](https://invezz.com/wp-content/uploads/2022/04/888-share-price-1024x496.png)
The 888 stock price has been in a deep downward trend in the past few months as growth in the sector slows. It has fallen by more than 50% from its highest level in 2021. The same has been the case for popular gambling stocks like Entain and Flutter Entertainment. Now, it has bounced back and is approaching the key resistance level at 278p, which was the lowest level in February last year. Still, the downward trend will likely resume in the coming days as the hype ends.
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Source: https://invezz.com/news/2022/04/07/888-share-price-went-parabolic-is-it-still-a-buy/